My iMac wont start

So I got an iMac from my uncle and I was doing the restore to factory settings. I've got up to reinstalling the Mac OS X Lion. Sometimes it stops half way. I've tried to switch my iMac on without going to the disk utilities but when it starts up, it makes the normal noise, I see the apple logo and then I see a circle with a line inside (like the no smoking sign except without the cigarette)

Can you explain, exactly, the process you've gone through to get to this point please

Ok so i used the instructions from the user manual. Restarted my iMac and pressed 'comman+r' to get to the Utility box. Selected Disk Utility and erased and renamed the disk on the left. Then quit disk utilty and went to reinstall mac os X Lion. this is where im stuck. either it stops and says can't complete and when i try to just restart my mac i got the apple logo and then the prohibitory sign....anything I can do?

What options did you choose when formatting?

Did the Mac originally come with Lion?

Are you connected to the Internet?

options...i used the erase function using mac os x (journaled)
i am connected to the internet
not sure if it originally came with Lion. It was bought middle of 2012.

So long as the disc is formatted Mac OS journaled GUID partition it should be ok..... Unless you've erase the recovery partition.

If this is the case you'll need to use Internet recovery by holding CMD + Option + R on startup

ok so i will try this and get back to u. I'm new to Macs so i hope i haven't messed it all up!!!

I'm currently trying this. It says Internet recovery this may take a while and then it comes to a box with available wifi in my house. And it stays there. Should it do this? It's been ages and its still showing the globe with all available wifi even if I've clicked on one.

It's now saying apple.com/support
-2002F

What's this???

Internet recovery can be slow as it has to download the 4gb lion installer. But it's your only option if you've erased the recovery partition.

You will need to select your wifi and enter the key, or connect it by cable

You may need to temporarily change the security on your wireless network to WPA rather than WPA 2

Ok gosh...such hard work....

It's a bit of a pain yes. But it sounds as though there may have been issues before you started.

Once you have a working system again I'd suggest making a bootable Lion install disc or USB.